Alro reports net profit of RON 376 million for the nine months ended 30 September 2007

Thu, 11/15/2007 - 01:00

Slatina, November 15th 2007 – The aluminium producer ALRO Slatina (BVB: ALR) today announces its financial results for the nine months ended 30 September 2007. The Company reported net profit of RON 376 million. Revenues reached RON 1.6 billion.

The current results are a direct consequence of the majority shareholder’s decision to implement the vertical integration strategy of its units in Romania. Thus, the production costs decreased, as ALRO develops its production chain to include raw materials, finished products and retail. In the first nine months of this year, the costs with raw materials and consumables were 10% lower than in the same period of 2006, mainly as a result of alumina price reducing in 2007.

Furthermore, the hedging losses registered in Q3 of 2006 didn’t occur this year, and the provisions for risks were substantially reduced in Q3 2007, compared to Q3 of 2006. The company’s financial costs decreased by 50% in January-September 2007, compared to the same period of 2006.

ALRO implemented a program of cost reductions in order to maintain its competitiveness in the international market. As a result, the Company reduced significantly the electricity consumption. However, the overall electricity and water costs increased by 20% in the first nine months of this year compared to the same period of 2006, from 311 million RON, to 374.4 million RON. The costs for the employees increased by approx. 44 million RON.

From 2002 to 2006, the company has invested over USD150 million in technological and environmental projects, resulting in a production increase of approximately 40%, from 187,000 tpa in 2002 to 262,000 tpa in 2006.

Commenting on the results, Gheorghe Dobra, CEO of Alro Slatina, said:

“ALRO’s financial results for the first nine months of this year are a confirmation that our development strategy is well implemented. We increased our primary production capacity while reducing the cost at the same time. The investments made over the past five years led to a higher productivity per employee, as well, and allowed us to take advantage of the higher aluminium demand registered on the international market. The relatively high aluminium price reflected positively in our financial results, as well”.